Bureaucracy tries to erode RBI governor's powers: Raghuram Rajan

Bureaucracy tries to erode RBI governor's powers: Raghuram Rajan: More clarity about the central bank's role needed, he writes in 'I Do What I Do'...



Interpreting Dr Rajan
This refers to the report “Bureaucracy tries to erode RBI Governor’s powers: Rajan” by Anup Roy (Business Standard, September 4). Dr Raghuram Rajan, with his long teaching experience and depth of knowledge of the subjects he handles, is an excellent communicator of ideas. Viewed in this context, his new book “I Do What I Do” which comes out after the one year’s self-imposed ‘silence’ (Rajan claims this silence was not to embarrass his successor when he settles down as RBI governor!) will be more explosive than the memoirs his two immediate predecessors brought out in quick succession in recent years.
Obvious difference between the memoirs of Dr Duvvuri Subbarao and Dr Y V Reddy and the collection of speeches and writings during his tenure being brought out in book form by Dr Rajan is that while the memoirs were written in leisure post-retirement, “I Do What I Do” interprets events during the three year tenure of the author’s stay at Mint Road by just adding notes or explanations to what Dr Rajan has already spoken or written as RBI governor.
As always, Dr Rajan has pre-empted his adversaries from reading more meanings into his writings. Two examples are here. One, about his exit on completion of his ‘sanctioned leave’, now he blames absence of ‘offer on the table’, while everyone knows, his one foot was all through in Chicago! Two, the cautious observation about short-term economic costs outweighing long-term benefits of demonetization now being made public is a master-stroke. As the opinion was given ‘orally’, it is always possible to play with the words like long term benefits and short term losses. Anyway, the present revelation makes it abundantly clear that RBI was associating with the groundwork for demonetization from February 2016.
Having said that, Rajan's contribution to sorting out some of the long pending relationship issues between GOI and RBI and expediting banking sector reforms will be remembered in India with gratitude.
M G Warrier,Mumbai

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